Buchanan Street Partners Sells Southern California Office Campus
- Dec 18, 2019
MGR Real Estate Inc. has acquired a two-building, Class A, 159,092-square-foot office campus in Ontario, Calif., from Buchanan Street Properties for $38.6 million.
The five-story, 91,357-square-foot building at 3110 E. Gausti Road was built in 2005 on a 6.54-acre parcel and is known as University Plaza as well as Waterside Center III. Tenants include University of Phoenix, National Multiple Sclerosis Society, the Hileman Co., Accountable Healthcare Staffing, GSA and U.S. Export Assistance Center. The current vacancy rate is 16.8 percent and there is about 17,500 square feet of space available for lease, according to Yardi Matrix data.
The three-story, 67,735-square-foot building at 3200 E. Guasti Road was built in 2007 on a .67-acre parcel and is known as Waterside Center I. Tenants include First Continental Mortgage, Regus, St. George Groupe, GSA, Personnel Concepts and Parsons. The current vacancy rate is 4.6 percent and there is 3,346 square feet of space available, according to Yardi Matrix data.
Newmark Knight Frank arranged the transaction on behalf of the seller and was represented by the NKF Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Directors Brunson Howard, Ken White and Paul Jones and Managing Director Rick Stumm. MGR Real Estate was self-represented.
Howard said in a prepared statement the new ownership is well positioned to capitalize on the office campus’ diverse roster of regional and national tenants and its location in the Inland Empire’s Airport Area submarket, one of Southern California’s tightest office markets. He noted the market’s fundamentals include cyclical low vacancy rates and continued net migration of residents and corporate occupiers. The vacancy rate for the Airport Area submarket is 7.6 percent, according to NKF’s Third Quarter Inland Empire Office Market Report.
Shannon added in prepared remarks the region is poised for continued rent growth and consistent capital appreciation because there are no new speculative office developments planned in the market. The property is located west of Interstate 15, immediately adjacent to Interstate 10 and blocks from Ontario International Airport.
Buchanan’s recent sales
In August, Buchanan Street Partners and CarVal Investors sold the 240,000-square-foot Richardson Office Center campus in Richardson, Texas, to Pillar Commercial. The company bought the property through its Pillar Real Estate Fund I and secured a $26.3 million acquisition loan from Bank of Texas, according to Collin County public records. The properties at 2001 and 3101 E. President George Bush Highway offer easy access to major employers, including the State Farm campus and Methodist Richardson Medical Center.
In June, Buchanan Street Partners also sold Axis 1950, a 121,541-square-foot office building in Carlsbad, Calif., to RAF Pacifica Group for $20.2 million. Located at 1950 Camino Vida Roble, the one-story building is adjacent to the McClellan-Palomar Airport and near other office properties and residential areas.